Freeport leads local rebound in permits for new homes

FREEPORT — Construction of single-family homes is showing a slow, steady recovery in coastal towns north of Portland, which jibes with national statistics.

The end of fiscal 2013 brought encouraging news for Freeport, a town of 7,900 residents. The code enforcement office issued 48 permits for single-family homes, which was the highest number since 2006, when the code enforcement office issued an identical number.

“It’s a good sign for the economy and the building industry here,” Town Manager Peter Joseph said. “Growth is back.”

Single-family home construction, or housing starts, is seen as a leading economic indicator. If numbers are trending upward, its a sign of a growing economy. Likewise, when numbers go down, it could be a sign of trouble.

In 2006 and 2007, housing starts throughout the nation and in coastal Maine took a nosedive at the onset of what would later be termed the Great Recession.

During that period, the number of permits issued in six coastal towns north of Portland – Chebeague Island, Cumberland, Falmouth, Freeport, North Yarmouth and Yarmouth – declined sharply each year from 2005 to 2007, then remained stagnant through 2011. In 2005, 206 permits were issued in the region. At the low point in 2011, 96 permits were issued.

In 2012, however, the six towns showed marked improvement with 132 permits.

So far, only Freeport has returned to pre-recession levels, but that might not be a bad thing, said Justin Brown, code enforcement officer in Falmouth. Last year, Falmouth issued 38 permits, down from a highpoint of 71 in 2006. So far this calendar year, the town has issued a modest 26.

Brown said the current numbers are within a “comfort zone.”

“If I saw huge numbers, I would be afraid it might come to a head with a drop to follow,” he said. “I’d rather see a gradual rise at a sustainable level.”

Joseph said he didn’t know if returning to pre-recession housing starts in Freeport indicates a housing bubble, but he did say sharp increases in growth can be challenging for towns. In schools, for instance, where there are a finite number of classrooms, a sudden boost in enrollment can quickly overwhelm the system.

“For us, it’s a mixed bag,” he said of the growth. “It was nice when it was steady, slow growth. It wasn’t good for the economy, but it was good for us. I would hope it doesn’t explode beyond where it is.”

Last year showed improvement for many individual towns. Cumberland issued 35 permits in 2012, the highest number since 37 in 2006. In North Yarmouth, the number rose to 14 in 2012, which was the highest since 16 in 2007.

For Chebeague Island, 2012 was its best year. The town of about 350 residents issued an all-time high of seven permits. Chebeague, which is the newest town in Maine, only has data going back to 2008. So far in 2013, the town has issued three permits, but Code Enforcement Officer Ron Tozier said it’s not a discouraging number.

“We’re right where we need to be,” Tozier said.

The local housing numbers generally reflect the national figures from the U.S. Census Bureau. In 2012, the United States saw 518,100 new single-family homes, the highest since 575,600 in 2008. Housing starts by May 2013 were higher than the same time in 2012, which could mean the country will finish higher this year than last.

In the Northeast region, however, numbers have generally declined or were static in the years since the recession began. In 2012, the were 44,000 single-family home starts compared to 126,600 in 2005.